ITC Ltd., the cigarettes-to-FMCG conglomerate, is set to grab investor attention on January 6 as its hotel division, ITC Hotels, spins off into a separate listed entity.
Under the demerger scheme, ITC shareholders would receive one equity share of ITC Hotels for every 10 shares of ITC. ITC would hold 40% stake in ITC Hotels and distribute the balance 60% among ITC shareholders in the same proportion of their holdings.
To facilitate the process, a special pre-open session would be held from 9 am to 9.45 am for fixing the price of ITC post-demerger. Trading in ITC’s shares would also resume from 10 am on that day. The indicative price of ITC Hotels would be derived by subtracting the newly determined price of ITC from its January 3 closing price.
ITC Hotels will be added to all NSE and BSE indices at a fixed price on its listing day and for the next three trading days. If the stock reaches the circuit limits during this period, its exclusion from indices will be delayed by two trading days each time.
This should be noted, ITC Hotels shares cannot be traded straight after the pre-open session. In fact, the trading will be done once the scrip gets listed on the stock exchanges.
Brokerages are expecting a good valuation for ITC Hotels. Nuvama said the IPO price for ITC Hotels shares could be in the range of ₹ 150-175 per share. Sharekhan also estimated a similar range, saying the hotel business could get a better premium valuation after listing owing to better price discovery in the market.
Investors keenly await the demerger, as this could unlock significant value for ITC shareholders, with ITC Hotels now well-positioned to capitalize on growth opportunities in the hospitality sector independently.
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Source: Moneycontrol
News Desk
